Question

Problems associated with acquisition include all of the following except:_______.A. Managers tend to focus on strategic controls when a firm becomes a highly diversified through acquisition.B. A major problem with buying other companies in order to gain access to their product lines is that the acquiring firm may lose its own ability to innovate. C. An increased risk of bankruptcy for highly leveraged acquiring firms.D. Dis-similar organizational characteristics between two firms in horizontal acquisition.

Answer 1

Answer:

The answer is option C) Problems associated with acquisition include all of the following except: An increased risk of bankruptcy for highly leveraged acquiring firms

Explanation:

When businesses decide to choose acquisition, It is usually to increase resources and competencies currently not held.

Acquisitions presents multiple advantages, ranging from immediate increases in revenues to improving long term financial outlook to making it easier to raise capital for other growth strategies.

An increased risk of bankruptcy for highly leveraged acquiring firms is not possible since acquisitions is a proactive response to mitigate bankruptcy.